Creating a bankable future for MSMEs
India continues to be a growing market for cheap exports, which has a direct impact on the MSMEs and their survival. The world over, governments provide supportive measures to their MSME sector through targetted benefits and facilities. In line with this international practice, a wider public procurement policy for MSMEs is essential to ensure a stable market for the MSMEs.
Currently, institutional entitlements like fiscal incentives, power connection, purchase preference, technology support etc are available only to the registered units, which constitute a mere 6% of the total MSMEs. Policy and institutional reforms are needed that would allow unregistered industrial units in the MSME sector to join the mainstream and enjoy all the entitlements.
The government should also undertake measures to implement all recommendations of the Prime Ministers Task Force that include supporting the district industries centres, ensuring enhanced raw material supply and facilitating product marketing support, thereby, giving the sector a stronger platform to operate from, which would eventually reduce their inherent risks and make them more competitive.
PPP and policy support
To address the issues of infrastructure, technology and skilled manpower, a tool that definitely should be considered is public-private partnership. PPPs are arrangements between government and private sector entities for providing public services and related infrastructure. PPPs are characterised by the sharing of investment, risk, responsibility and reward between the partners.
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